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dbuell1987
Level 1

How to: Categorize Owner's Short-term Loan to Business

G'day, QB Community, 

 

Recently, my partner and I made two separate deposits into our business checking account from our personal checking accounts. Our business was hard up for working capital and we needed to take action to keep us afloat. Since these deposits were meant only to be a temporary influx of capital, I have since reimbursed both of us by check for these short term loans. I have been scouring the internet for an answer on how to treat this scenario - to no avail. How should these transactions be categorized? There are two money-in transactions and two money-out transactions. 

 

Any answers are greatly appreciated!

 

-Dusty

 

1 Comment 1
RCV
QuickBooks Team
QuickBooks Team

How to: Categorize Owner's Short-term Loan to Business

Let me help you record the owner's short-term loan in QuickBooks Online (QBO), dbuell1987.

 

In QBO, we track and categorize the business loan by setting up a liability account. Then, we can create a journal entry to record the loan and record its all payments. To set up a liability loan account, follow the steps below: 

  1. Go to Accounting on the left side menu. 
  2. Select Chart of Accounts.
  3. Tick the New button. 
  4. In the Account Type field, choose either Other Current Liabilities (to be paid in full in one year) or Long Term Liabilities (to be repaid over more than one year), depending on the type of loan and its repayment time frame.
  5. Select either Other Current Liabilities or Long Term Liabilities in the Detail Type drop-down list. 
  6. Enter the details in the Name, Number, Description, and Currency fields. 
  7. Leave the Unpaid Balance field blank.
  8. Press Save and close.

Then, follow Step 2 and Step 3 in the How to record a company loan from a company officer or owner article to complete the process. Once done, we run the Transaction Details by Account report to track the loan account. Let me show you how:

  1. Go to Reports on the left side menu.
  2. Enter Transaction Details by Account in the search field.
  3. Tick the Customize button.
  4. Tap Filter and choose Account. Then, select the liability loan account you've set up.
  5. Press Run report

Feel free to visit our QBO Help Articles page for more insights about running our business in your account. 

 

I'm just one post away if you need a hand with customizing your financial reports or any QBO related. I'm always here to ensure your success. Have a great day.

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